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Refinancing Could be the Key to a Lighter Debt Load

This is an article that was published with the Cambridge Times on October 1, 2017, featuring our very own, Tracy Valko:   Tracy Valko of Dominion Lending Centres in Kitchener, Ontario, reminds homeowners that the solution to non-mortgage debt could be a lot closer to home than they think. Equifax Canada, which provides consumers credit bureau information, says that non-mortgage debt has risen 3.3 per cent in the second quarter of 2017- which is alarming, because household debt in Canada is already at al all-time high and many people are living paycheque to paycheque to make ends meet. However, if you’re having trouble making minimum payments on credit cards and other loans, the solution may be your mortgage equity.  If you’ve owned your home for some time, or even if you’re a relatively new home-owner and your property has increased in value substantially, you might be able to tap into …
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Time to Lock in a Variable Rate Mortgage?

Approximately 32 per cent of Canadians are in a variable rate mortgage, which with rates effectively declining steadily for the better part of the last ten years has worked well. Recent increases triggers questions and concerns, and these questions and concerns are best expressed verbally with a direct call to your independent mortgage expert – not directly with the lender. There are nuances you may not think to consider before you lock in, and that almost certainly will not be primary topics for your lender. Over the last several years there have been headlines warning us of impending doom with both house price implosion, and interest rate explosion, very little of which has come to fruition other than in a very few localized spots and for short periods of time thus far. Before accepting what a lender may offer as a lock in rate, especially if you are considering freeing …
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Credit Scores: Here’s what you need to know

The interest rate you pay on loans for every major purchase you make throughout your lifetime depends on various factors, and is dependent on your creditworthiness – everything from the mortgage on your home to your car loan to your line of credit. And, given today’s ever-changing mortgage requirements and rising interest rate environment, your credit score has become even more important. Your first step towards credit awareness and wellbeing is to know where you stand. Request a free copy of your credit report online from the two Canadian credit-reporting agencies – Equifax Canada and TransUnion Canada – at least once a year. This will also help verify that your personal information is up to date and ensure you haven’t been the victim of identity fraud.   Newly established credit If you’re new to credit, you may wonder why your credit score pales in comparison to your friend’s. Payment history …
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Mortgage Pre-approval is Not What You Expect

Although going through the pre-approval process is more important than ever, the actual term ‘pre-approval’ is often misleading. It really addresses just a few variables that may arise once in the middle of an actual offer. The pressure in many markets has never been greater to write a condition-free offer, yet due to recent changes to lending guidelines by the federal government, the importance of a clause in the contract along the lines of ‘subject to receiving and approving satisfactory financing’ has also never been greater. (There are variations to be discussed with your Realtor around the specific wording of such clauses.)

Effect of foreign buyer tax still uncertain

On April 21, Toronto became the second Canadian city to implement a ‘foreign buyer tax’. The impact that the 15 per cent tax on residential real estate will have on the market remains to be seen. The fact remains that Toronto’s residential real estate supply remains at a 37-year low, and economics 101 taught us that reduced supply results in increased prices. Trying to tackle the problem of rapidly rising house prices from the demand side is popular when it is a method that primarily impact ‘other people’, especially outsiders who we grant less of a right to real estate ownership. Understandably we favour locals, or at least a definition of ‘local’ that resonates with voters. Vancouver was first to this approach in August of 2016, although the results remain unclear. The stats on the impact were skewed as many of the transactions set to close in the months following …
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Playing with “house money”

How much of the current record-setting price gains in several Ontario and BC markets are self perpetuating? That is, ‘I just got paid $100,000 over asking, so now I too will pay $100,000 over asking…’ After all it is ‘found money’ – easy come easy go. For those of you smart enough to avoid the casino, you may not be familiar with the term house money. This describes a players winnings, gambling with said winnings – with the house money rather than their own. Of course it is actually the players money, it is in their hands not the ‘houses‘, but it arrived easily and quickly and thus no deep attachment has formed – unlike with hard earned and slowly built up savings. And we humans often take bigger chances with ‘found money’. The effect can be seen in stock markets as well. Strong market performance will change an individuals …
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What About My Mortgage Pre-Approval?

Although going through the pre-approval process is important, the actual term ‘pre-approval’ is often misunderstood. An important point to be clear on is that while you may be pre-approved for a certain mortgage amount, there are several variables that can derail a final approval once you write an offer on a property. As such it is imperative that offers include a condition (or ‘subject’) clause along the lines of ‘subject to receiving and approving satisfactory financing’. This is arguably the single most important clause in a contract (an inspection being a close second), because without the financing, how will you complete your purchase? The pre-approval process should be considered more of a personal pre-screening process than anything. It should include a lender review of a current credit report and review of all required income and down payment documents. You should have a clear understanding of the maximum mortgage amount you …
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